4th Jul 2016 07:48
LONDON (Alliance News) - Educational IT and resources company RM PLC on Monday said pretax profit fell in its first half on the back of an expected decline in its RM Resources and RM Education divisions, but RM said it was confident of meeting its full-year expectations.
RM posted pretax profit of GBP6.0 million for the six months ended May 31, down from GBP9.2 million for the same period a year earlier, after revenue fell to GBP76.8 million from GBP79.8 million and the GBP2.4 million gained for the same period a year earlier through adjustments relating to the release of provisions for dilapidations on leased properties and onerous lease contracts did not repeat.
The revenue decline came from its RM Education business, which provides IT services to colleges and schools in the UK, where revenue fell to GBP34.2 million from GBP36.5 million, largely due to lower Building Schools for the Future activity and the change of strategy away from making and selling PC client devices.
Meanwhile revenue in RM Resources, its distribution business, also declined slightly to GBP29.3 million from GBP30.6 million, driven by significant curriculum change in UK primary schools and continued tightening of UK schools budgets.
However, revenue within the RM Results division, which provides IT software services to enable on-screen exam marking, rose to GBP13.2 million from GBP10.6 million, on the back of an expanded five-year managed services contract for English language exams with international exams group Cambridge Assessment.
RM said that while market conditions in the UK Education sector continue to be subdued as a result of pressure on school budgets, it is confident of delivering results for the year in line with expectations, with a focus on "the right balance of investing in the three divisions while ensuring that margins can be maintained or improved in 2016".
RM raised its interim dividend by 25% to 1.50 pence per share, from 1.20p per share the same period a year earlier, which it said was a reflection of its commitment to reduce dividend cover.
Shares in RM were untraded on Monday, having last traded at 118.00p.
By Hannah Boland; [email protected]; @Hannaheboland
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